Cisco NZ awaits job cut details

Cisco New Zealand expects to remain unscathed by the 8500 job cuts announced by its California-based parent.

Cisco Systems has announced it will dump 17% of its workforce to make annual savings of $US1 billion, as it expects quarter-to-quarter sales to plunge 30% from $US6.75 billion to $US4.72 billion in the quarter ending this July.

The restructuring is expected to cost Cisco $US800 million to $US1.2 billion and the company faces an additional charge of $US2.5 bilion for excess inventory.

However, New Zealand manager Tim Hemingway says with the departure of three contractors last month, he was not expecting further job cuts locally.

The New Zealand economy is "quite buoyant", particularly in comparison with Australia, where there is much talk of recession, he says.

"The big thing that has hit in the US is service providers. We do not have the scale of service providers here that they have. We are not seeing the dramatic reduction (in sales) as in the US. We are in a particularly good position relative to other countries," he says.

Hemingway says Cisco New Zealand still expects further "double-digit" year-on-year growth " this year, though it won't reach the 50% annual growth of past years.

This would be helped by new telephony and wireless products creating "new revenues on top of the server and router part of the business", he says.

However, Hemingway says he cannot comment on profits/losses made by Cisco in New Zealand.

"We do not actually measure that on a country-by-country basis. We look at it across product lines. We look at revenue per employee but not profit per employee," he says.

Hemingway says it will not be until mid-May before the local impact of last week's job cuts is known.

"We have not gone through the detail as to what that means here," he says.

Cisco New Zealand staff are primarily in sales and support roles for the channel with some engineers in pre-sales positions. Cuts on marketing the brand have already taken place.

"We don't expect there to be much impact on our customers and partners," Hemingway says.

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